But collaboration with the US biotech remains in place

AstraZeneca (AZ) has been force to halt the development of obesity drug AZD2820 with US biotech Palatin after a serious adverse event occurred during an early stage trial.

The phase I trial was discontinued in June, 2012, after one subject was suspected to have had a significant allergic reaction following his first dose of the drug. He was subsequently treated at the clinical site and has since fully recovered.

AZ was unable to rule out a link to AZD2820 in its investigation into the trial and so decided to abandon the candidate but not its broader collaboration with Palatin.

This follows the investigation's conclusion that the trial problems were unlikely to be related to melanocortin receptor activation as an approach for the treatment of obesity, which is focus of the AZ-Palatin deal.

“The AZD2820 compound is part of a broader research and development collaboration with AstraZeneca,” said Dr Carl Spana, president and CEO of Palatin.

“We have multiple classes of collaboration compounds in various stages of preclinical testing and AstraZeneca has informed us that they remain committed to the advancement of collaboration compounds for treatment of obesity.”

The decision to drop AZD2820 is still a major blow for Palatin, however, and shares fell 5 per cent as the news emerged.

It also hurts AZ, with the company having already endured a series of trial disappointments that led to the departure of CEO David Brennan in April.

The obesity market is a difficult one to crack, with weight loss having notorious links with adverse events during the past couple of decades.

High profile casualties have included fenfluramine and dexfenfluramine, both of which were pulled in the 1990s after they were linked to heart problems.